Bipartisan housing tax credit bill reintroduced in Congress

The Neighborhood Homes Investment Act has been reintroduced in the latest session of Congress, once again with bipartisan support.

At the end of the 118th Congress in December, the House version of the bill had 110 co-sponsors, while the Senate had 16, a press release at that time from the Neighborhood Homes Coalition said.

Reps. Mike Kelly, R-Pa., chairman of the Ways & Means Subcommittee on Tax and John Larson, D-Conn., ranking member of the Ways & Means Social Security Subcommittee, introduced the new bill.

"The Neighborhood Homes Investment Act will allow homeowners and developers to not only affordably restore beautiful homes, but also to build and create more affordable housing in communities that need it the most," Kelly said in a press release. "For the families whose dreams of homeownership feel unattainable, this bill could make those dreams closer to reality."

If passed as envisioned, the NHIA would create a tax credit program, awarded to sponsors through competitions administered by state housing finance agencies.

The sponsors would use the credits to raise financing for their projects, with the investors able to claim them against their federal income taxes.

Those credits can only be claimed for homes developed or rehabilitated in eligible low-income communities. This would happen only after the homes are sold and occupied by lower or middle-income families.

"We will continue to work together to spur the development of good, quality housing in the Northeast and across the country, and make homeownership a reality for more of our nation's families," Larson added.

The other co-sponsors are: Randy Feenstra, R-Iowa; Vern Buchanan, R-Fla.; Carol Miller R-W.Va.; Mike Carey, R-Ohio; David Kustoff, R-Tenn.; Nicole Malliotakis, R-N.Y.; Nathaniel Moran, R-Texas; Terri Sewell, D-Ala.; Danny Davis, D-Ill., and Jimmy Panetta, D-Calif.

On the Senate side, Todd Young, R-Ind., will reintroduce the bill as lead sponsor, with Mark Warner D-Va. The previous versions of the legislation had been co-sponsored by Sen. Ben Cardin, D-Md., who retired at the end of the last session.

"This legislation also includes important guardrails to ensure that tax incentives target the families that need it most," Young said in the Neighborhood Homes Coalition release. "I am encouraged by the increasing amount of support this effort is receiving, and I am hopeful that Congress will pass this legislation soon."

The National Housing Conference, a long-time supporter of this legislation, cheered the announcement.

"With a shortage of affordable housing supply, this initiative would help bridge the gap between development costs and market prices in neighborhoods where housing values don't currently support new construction and rehabilitation lending," David Dworkin, president and CEO, said in a statement. "Over the next decade, NHIA can support the creation of hundreds of thousands of homes where it's needed most."

The bill also has mortgage industry backing.

"MBA supports key tax legislation that boosts entry-level housing supply and improves affordability," including the NHIA, said Bill Killmer, in a statement. "As this bill and other bipartisan tax credit proposals are reintroduced in the 119th Congress, we will advocate for their inclusion in any major tax package Congress enacts this year."

The Community Home Lenders of America is also on board, noting if passed, it would reduce the inventory shortage.

"CHLA has long been a supporter of the Neighborhood Homes Investment Act," Scott Olson, executive director, said in a statement. "The best way to address housing homeownership challenges is through the supply side of the equation — and this bill could help in that regard."